January 15th, 2020 10:15 AM by Jackie A. Graves, President
After years of preparing for this moment in your life you are
finally ready. No, not marriage, but buying your first home. It’s taken you a
long time to get here and there was a lot of sacrifice along the way but it
paid off in the end because you have enough money saved for the down payment
and your credit score is fantastic. Even though you think you are prepare you
may be wondering, “where do I start?” In the next few paragraphs we will
discuss your starting point, ending point and everything in between.
This is the first and probably the most important you should ask
yourself before you take another step. Sure you may love the house on the upper
east side of town but can you afford the monthly payment every month? The house
down the street from your parents is to die for but you will you die trying to
make the mortgage?
Let’s start by figuring out how much you can afford and that will let your real
estate agent know what area town to start searching in. Get your finances
together and make a budget that includes your income and expenses. Your
mortgage payment should be around twenty five to twenty eight percent of your
monthly income. This is a safe percentage that will help you not overextend
yourself and your budget. Now that we know how much we can afford let’s move on
to the next step.
Having the right real estate agent can make all the difference
in the world when you purchase a home. Picking one that is experienced and
knows what they are doing will help eliminate confusion between the two of you.
You need to be able to communicate to your real estate
agent what you are looking for in your new home and what you
are and aren’t willing to compromise on. For example, if you want a home that
is energy efficient and that has solar panels and you’re not willing to budge
on it, then you need to make sure your agent is aware. This will give them a good
starting to point to begin their search. Often real estate agents have close
working relationships with brokers so they will be able to tap into a market of
homes that you wouldn’t be able to do on your own. Some of the key things that
you need to ask your realtor about every property that you are considering are:
1. Has the home ever flooded?
2. Is the home located in a flood plain?
3. Does the home have mold?
4. What are the yearly taxes on the home?
Often home buyers, especially first time home buyers, forget to
ask these important questions and they don’t find out the answers until its too
late and they have already bought the home. The reason you need to know the
monthly taxes on the home is because this will directly affect your monthly
mortgage amount. After you have finally picked out the home you like make sure
and get a home inspection. A home inspection will tell you if there is anything
majorly wrong with the home like foundation problems or a faulty roof.
Only you will be able to truly decide which loan best fits your
needs and accommodates your financial situation, but here a few helpful tips.
Try and do a fixed rate mortgage because with a fixed rate mortgage your
payment will never fluctuate like it could with and adjustable rate mortgage.
Put as much money down as you can afford because it will help keep your monthly
payments low and manageable. The length of your loan can be anywhere between
ten and thirty years but it’s always a good idea to make the term of the loan
between fifteen and twenty years.
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